James Caan is about to undergo a dramatic image transformation. The private equity investor and television celebrity, better known for his role as one of the fearsome entrepreneurs on Dragon’s Den on BBC Two could instead gain a reputation among struggling homebuyers as a knight in shining armour, if his latest business venture takes off.
Caan, who is also the chief executive of Hamilton Bradshaw, a private equity firm, is to plough money into the property market for the first time. He will offer free money to homebuyers in a venture that will take on Rightmove.co.uk and other property websites. It is a bold move that depends on further recovery if he is to make a return.
Caan, with backing from Hitachi Capital Finance, has provided £1 billion to offer interest-free unsecured loans of up to £50,000 each to people who want to move house but need extra cash to cover their stamp duty or legal fees.
The catch is that they will be offered only through estate agents who sign up to look4aproperty.com, the property search website set up in January in which Caan has a 25 per cent stake. The agents, not the homebuyers, will effectively pay for the loans through a £200 site registration fee, in exchange for the right to market loans to their customers.
Caan said: “A healthy housing market is the lifeblood of the economy. This country needs some initiatives to get things moving again. This scheme gets rid of financial obstacles which are holding up the housing market. It means that thousands of people who have been putting off moving or buying their first home can now climb up the property ladder without further delays.”
When asked whether the timing of the offer — when high street banks remain reluctant to lend to risky homeowners — was a good idea, he replied: “Interest rates are at the lowest level in history. When we did our research, we worked out that because borrowers will be paying relatively little for their mortgage, they would have surplus cash with which to repay the loan from us.” Only homebuyers who have a mortgage arranged can apply, meaning that the loans, which are expected to be for an average of £4,000 to £6,000, cannot be used to fund deposits. Borrowers will also have to undergo credit checks.
For estate agents, the fee will come at a time when agencies are struggling to dust themselves off after one of the most difficult periods in the industry’s history. However, some agents said yesterday that they supported the idea.
James Hyman, of Cluttons, the London-based agency, said: “It makes commercial sense, doesn’t it? Everybody is going to take advantage of that because you could put the extra cash into the purchase and afford somewhere better. I’d be very surprised if every agent doesn’t support it. We’d want to see the quality of the portal and its search engine optimisation before signing up, but this offer makes it a very appealing website.”
Look4aproperty.com, set up by Aaron Turner, who is now chief executive, is yet to gain the widespread reach of other property portals such as Rightmove.co.uk or primelocation.com. Caan told The Times that the site will launch similar ideas to establish it as the leader in a competitive market.
“With this proposition, we think we will become a clear market leader. Property portals are competitive, so you need new ideas, to be creative and interesting,” he said.
More details on link below :
http://property.timesonline.co.uk/tol/life_and_style/property/article6922872.ece
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